Payday lender Wonga slips into the red as regulatory crackdowns take their toll

Having previously worked at Property Week and Management Today, my areas of expertise are housing, entrepreneurs and leadership, as well as cars and the automotive industry. In 2015 I won the British Media Awards' Rising Star of the Year award.

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Emma Haslett

The company slipped into the red for the first time in 2014 (Source: Getty)

The figures

Things aren't looking good for much-maligned payday lender Wonga. Figures posted today showed it slipped into a pre-tax loss in 2014, to the tune of £37.3m, down from a profit of £39.7m this time last year, as various regulatory crackdowns took their toll on its figures. That pushed it to a net loss of £42.8m.

Revenues, meanwhile, dropped almost a third to £217.2m, while operating costs rose 12 per cent to £150.2m.

Why it's interesting

The payday lender's troubles during 2014 have been well documented. Not only did it go through more chief executives in just over a year than most companies go through in a decade (following Errol Damelin's departure in November 2014, replacement Niall Wass quit in May and Tim Weller stepped down in November), but earlier this year it was also ditched by its ad agency.

What Wonga said

Haste said:

On joining Wonga last July, I set out six priorities to deliver essential change and this period has been focused on delivering against those priorities.

We said Wonga would be smaller and less profitable in the near term as we focus on creating a sustainable business that lends responsibly and transparently to customers who can afford to borrow from us. Today’s results are clear evidence of the changes we have made and are continuing to make. We know it will take time to repair our reputation and gain an accepted place in the financial services industry, but we’re determined to deliver on our plans and serve our customers in the right way

In short

Wonga was always going to have to hit rock bottom before it recovered - but it may be too late for the company's tattered reputation.